What are tariffs good for?For years, mainstream economists have basically said: tariffs are not good. They are an import tax paid by consumers, they've said, and they discourage free trade, and we want more! Because free trade has broadly led to more global economic growth.But global trade hasn't been all positive for Americans, and in the worldview of President Trump's administration, tariffs can be used to right some of those wrongs. And the U.S. has economic leverage. So if the U.S. wants to level the playing field, it should use that leverage, and use tariffs to accomplish its policy goals.Today on the show: the case for tariffs. We talk to a lonely economist who's been sounding the alarm for years that more and free-er trade isn't always better. And we speak to economists in President Trump's orbit who make the case for how tariffs can be a potent economic and political tool.This episode was produced by Willa Rubin and edited by Meg Cramer. It was fact-checked by Sarah McClure and engineered by James Willetts. Alex Goldmark is our executive producer. Find more Planet Money: Facebook / Instagram / TikTok / Our weekly Newsletter.Listen free at these links: Apple Podcasts, Spotify, the NPR app or anywhere you get podcasts.Help support Planet Money and hear our bonus episodes by subscribing to Planet Money+ in Apple Podcasts or at plus.npr.org/planetmoney.Music: Universal Music Production: "Funky Reverie" and "With It;" Audio Network: "Slush Puppy Soul."Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy
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Today is a big day. For weeks, we have been hearing about April 2nd. The Trump administration had promised that today would be the day that they put new tariffs on goods coming in from, I don't know, maybe every country in the world.
This is one of the most important days, in my opinion, in American history. It's our declaration of economic independence.
The looming tariffs had sent chills down the spines of many economists around the world.
Because tariffs, they're an old economic tool that many economists have disliked for a very long time. They're basically an import tax paid mostly by consumers.
And for centuries, they've been used to make a country's population buy its own stuff instead of another country's stuff.
But economists generally prefer more and freer trade because it means more competition, lower prices, economic growth. A bedrock theory in economics is the theory of comparative advantage, that basically countries can specialize in different things, and through trade, we can all, in the aggregate, get richer.
But surely, tariffs have been useful ever, or they wouldn't exist, right? Right? Hello and welcome to Planet Money. I'm Mary Childs.
And I'm Greg Rosovsky. Today on the show, the case for tariffs. What can they be good for?
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